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Truthfully, I think negative feedback is more than fair in this scenario. As a seller, you list an item, and while it's for sale and then purchased.. it gets lost? How hard is it to keep something put aside, especially considering you plan to enter into an agreement with someone to purchase said item? With all due respect, to buyers it will look like you either didn't care enough, or you're incompetent.

...and be honest, now that you got dinged you will probably be more prudent in the future so this doesn't happen again. If you didn't get dinged... would you be overly concerned about this happening again? Probably not....

If a buyer reneged on a purchase because he "lost" his money.... how understanding would most sellers be?? Think about it...

Thats the way it should be. Buyers should not have to worry about retaliatory feedback if the seller messes up. The system is not perfect but its better than the old way

This. ^

To answer the question, it is fair. That's exactly what feedback is for. If the buyer felt like it was a negative experience, then they have the right to leave negative feedback.

That said, I probably wouldn't do it, but it would also depend on the situation. If I thought I got a really good deal on something and that the seller just didn't want to complete the transaction because they thought they could get more money for the item, then I would probably leave negative feedback. But if it was something that I could purchase for the same price any other day, then I would accept the seller at his word and just chalk it up as a mistake.

One thing I've noticed becoming more common with the rise of places like Amazon is a serious lack of patience from pretty much everyone. There are a few patient people, but not as many as before.

I've had a couple selling experiences that were similar.

First one was when I was fairly new to Ebay. Sold an old weightwatchers ad flyer for I thin $3. And in the batch of stuff I was shipping it got under a box flap and I didn't know about that for a while. Meanwhile the buyer wrote a nasty email - Somewhat understandable. I figured the mail might be slow since my incoming was spotty and asked for a couple more days. No luck, so I sent a full refund, shipping included, plus a bit extra as an apology, and offered to send it free if it ever turned up.
Got a negative on that. Kinda bugged me at the time, as it was my first.
Didn't send it when I eventually found it a month or two later.

Fast forward a few years.
I sell a 3-d Disney postcard for a pretty decent amount. And to my dismay I can't find the stack of them I have. Pretty bad, since they're BINs.... Pull the rest right away, write a very apologetic email to the buyer, refund from PP immediately after, same thing, I offer to send it free when it turns up, which I'm sure it will. Buyer is disappointed, but says it's ok. Leaves no feedback. (Negative would have been deserved, and I really felt bad about losing the whole stack, maybe 20 of the things. )
About a full year later I find them.
Go through emails etc and find her email.
Good news, if you still want it the 3d postcard finally turned up!
Reall? How much?
Free, no charge, no shipping.
Ok, thanks.

I sent one of each and she was really happy.

A few other situations happened, but fortunately all the buyers were reasonable. A couple were actually pretty cool.
What should I do with the cracked BMX helmet?
Well, it's no good, so don't bother sending it back. It's just solid white, so I'd see of a local graffiti guy could airbrush or spray it with something crazy then I'd make a lamp out of it, but whatever want to do is fine.
....Them....That's a great idea! Thanks!

Once they made feedback a one way street I stopped doing it. I will if a seller goes way beyond what's reasonable, or is new and requests it, but in general I don't bother. It's mostly meaningless. A handful of sellers I like also very occasionally get feedback, to keep their dsr numbers up.

I check a sellers negatives sometimes, and find that most of them are from a few of the same sort of people.
1) People who can't read so they miss important parts of the description.
2) People who are only marginally connected to the reality the rest of us live in. Like the ones who buy from Europe and complain their item didn't arrive within 2 days. (remarkably, I've had a few stamp sellers regularly have stuff they ship to me from Europe arrive faster than I'd expect from a US package. One from Norway actually did only take two days )
3) People with very little feedback - they're usually the most impatient unreasonable ones out there.

If a buyer reneged on a purchase because he "lost" his money.... how understanding would most sellers be?? Think about it...

I have had 4 buyers cancel orders within the last 2 weeks; it was within a few hours and before I even shipped item, no harm no foul, right; {wrong I have to get my credit from ebay and I have to relist item and usually pay for add'l listing because my limit is used up} but it happens a lot more than you would think. I usually just relist & move on

__________________MY EBAY STORE; If you see something you Like PM me.If you bought off me and were happy let others know;
if you bought off me and weren't satisfied for whatever reason let me know..

Here's the thing, if you've got stuff listed on eBay, it needs to be in one specific place, easily accessible, and in order, PERIOD.

I don't care if you have 1 item or 10,000 items listed, be organized or don't be on there at all. It's not that hard.

That being said, not being able to leave a buyer negative feedback is definitely a significant drawback to eBay as some people non-pay, abuse eBay rules/policies, etc. A "non-payment" strike isn't enough to stop people.

I've set my eBay requirements as strict as I can make them and would make them even stricter if I possibly could. It just weeds out all of the a-holes that are on there. I look at my list of people blocked from buying/making offers on my items and about 99% of it is "Too many non-payment strikes."

I don't have a perfect answer but Buyer Feedback should be different than Seller Feedback (they should also be listed separately). Someone smarter than me should develop a system kind of like a credit score.

Here are the thoughts. Your score could go up and down in a few different ways -

Score goes up
Positive Feedback from Sellers - Big Impact
Leaving Positive Feedback for Sellers - Medium Impact
Paying for auctions in a certain amount of time - Small Impact
Length you are on ebay - Medium Impact

And when I say your score could go down based on leaving negative feedback this is what I mean. If I pay all my bills on time for years and have a couple of long term credit cards then maybe I have an 800 credit score. But lets say in a 2 month period I apply for a couple of credit cards, a car loan, and a house loan my credit score could be hurt very slightly with hard inquiries. But lets say I decide not to pay my bills and I get reported to collections this will have a huge impact on my credit score.

So leaving negative feedback would have a low impact on your ebay buyer rating while bid retrations and non-payment would have high impacts on your ebay rating. And then maybe set a threshold where sellers can block buyers who are below a certain threshold. It would put more responsibility onto the buyers and make them think twice about certain things. Maybe try to resolve the issue before leaving a negative feedback or not paying for an item or retracting bids.

I am saying this and I am only a buyer. I have sold less than 10 things on eBay in my life. But now I could start selling things on eBay with a 100% FB rating. And maybe I'll turn out to be a crappy seller.

I've thought about this outdated rating system from eBay and I feel they could do a better job. Whether its something revolving around my idea of not. Buyers should feel comfortable leaving negative feedback when the experience is negative but if they do it all the time without trying to resolve the issues it should reflect in their rating. Just my opinion.

I don't know about the "reply to the negative" advice. Unless they're for selling counterfeits or something like that, I don't hold a negative or two against a seller. Things happen, isolated incidents are no big deal. What does make me reconsider dealing with someone is when they reply to their negatives blaming the buyer. Even if they're right, and it's the buyer's fault, the reply makes them sound like a jerk and someone whom it would be a hassle to deal with if things didn't end up going smoothly.

This would be one reason I have been thinking about not taking offers on items I do not have a best offer on - I get emails all the time to lower my price or get a lower offer - and have had similar issues, but nothing like this - so yes what happen to you may not be fair - but everyone is different and I would not have left you negative feedback